Non-Resident Capital Gains Tax (NRCGT)

Since April 2015 there has been a charge to capital gains tax on non-residents disposing of UK residential property.

Whilst the rules came into force a couple of years’ ago, many remain unaware of the rules, and in particular the very tight 30 day time limit for submitting Non-Resident CGT returns to HMRC following disposal of the property.

This can be particularly demanding as the rules on NRCGT will often require that a valuation of the property as at April 2015 be carried out as, effectively, only gains from this point on would be taxable.  Taking action in advance is likely to be the best approach.

As ever in tax, the position in not straightforward, as there are a number of different options for calculating the gain which can be elected for by the taxpayer.  This is another area that taking professional advice will help to maximize any planning opportunities.

A further complication can arise as the rules apply to non-UK residents.  However, it is possible that a taxpayer could be unaware of their residence status at the point of disposal because the rules on UK residence can apply to the whole tax year, even when changes take place in the year.  Unexpectedly becoming non-resident would mean that a NRCGT return would be needed within 30 days of becoming non-resident, which is likely to catch many people out.

If you are disposing of UK property and are non-resident or spend time outside the UK, it is important to take professional advice as soon as possible.  We would be delighted to assist and have advised a number of clients on the rules regarding Non-Resident Capital Gains Tax (NRCGT).

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